You might think that only the wealthy elite, Wall Street, hedge fund types are the only ones that the secrets of the stock market are open to. Think again: one pattern that has emerged during the pandemic times is that there has been more of a level playing field among investors, especially those that have been trending as younger and less experienced. An interesting phenomenon has come in the form of the GameStop short squeeze, which will w ill discuss below.
We have already seen signs of this emerging trend on apps such as RobinHood, but an interesting development occurred when a Reddit community known as WallStreetBets emerged and noticed an interesting pattern where GameStop among other specific stocks of companies that were underperforming were being shorted. While many individual investors have profited from this as a result, larger institutional investors may be paying the price.
When Reddit and other such communities began to bet against the short positions (what’s known as a short squeeze) of very large hedge funds, it sent these markets into an incredible run up. At its height, the GameStop (GME) stock price was up over 1250% from the start of the year.
Learn more about the GameStop short squeeze and the battle for Wall Street in the visual deep dive below: